Fearing President George W. Bush’s remarkably resilient popularity, Democrats have launched a new spin campaign to lay responsibility for the current deficits on last summer’s bipartisan tax cuts. Republicans are merely replying with the defense that the war on terrorism is costly, without pinning the blame on the donkey: Democrats and their spendthrift ways. Conservatives need to seize this golden opportunity to end the fascination with deficits and teach Americans that spending creates fiscal chaos.
Since 1980, the size of the federal government has tripled. Even though Washington was operating in the red for most of that period, pork barrel projects and the welfare state grew unabated. With the exception of Ronald Reagan’s 1981 tax cut, which dramatically boosted tax revenues through robust economic growth, taxes were increased as necessary to underwrite liberals’ lavish habits.
Given Congress’ freewheeling ways in the past two decades, last year’s tax cut has little to do with causing the present fiasco. Faulting the tax cut for the newfound deficits is like blaming the person who grabbed the last slice of pizza for eating the whole thing. In other words, it’s the spending, stupid!
For years, conservatives have battled profligate Democrats and free-spending Republicans to hold down the size of government. To tame the beast, their rhetoric revolved around the deficit. When Washington started taking in more money than it spent, conservatives were quick to note that these new surpluses were the result of excess Social Security taxes. And the lockbox was born.
The trouble with basing your arguments on the deficit (or surplus) is best summed up by Americans for Tax Reform president Grover Norquist. The deficit or surplus is a relatively unimportant number sandwiched between two figures of paramount importance: the amount Washington soaks taxpayers for, and the cash expended to operate the federal government. Both these figures have reached obscene levels.
With $2 trillion in annual tax revenues, the federal government gobbles up more than 20% of the nation’s gross domestic product. Before September 11th, the only thing stopping Congress from spending every last dime was the political pressure to not spend the Social Security surplus. Now that that keg is tapped, there is no external pressure to limit spending.
The lockbox was the last bulwark against the ever-expanding girth of government. Of course the lockbox is a mere fiction, but it’s a beltway myth that was used for good in battling the forces of evil. When a politically appealing program was proposed, such as a prescription drug benefit or a standard-issue pork project, conservatives could stand firm in defense of the Social Security surplus. But without that weapon in their arsenal, conservatives are merely flailing their arms in a lame attempt to stop the tidal wave of new spending. Unquestionably, legitimate homeland defense measures costing tens of billions are essential for our safety, but politicians are wrapping all sorts of pork in American flags and asking voters to salute.
Conservatives wouldn’t have been stuck in the lockbox, so to speak, if they had convincingly made the case long ago that the size of government and level of taxation were the things that matter. Sure, a few brave conservatives have backed this cause, but most of the conservative rhetoric had centered on the deficit or surplus as a proxy for the meaningful numbers.
But the deficit/surplus game is a shoddy substitute, because liberals can use it to defeat tax cuts or hike taxes, all the while spending more. Remember those so-called “deficit reduction” packages of 1990 and 1993? Remember how spending was cut? Taxes were raised each time, but spending was not reduced either time. Projected spending was brought down, but only in myopic Washington is that considered a cut when actual spending goes up.
In fiscal years 1991 and 1994, whose spending bills were approved in the same years as the respective “deficit reduction” acts, spending climbed. Non-defense discretionary outlays, the money that Congress has year-to-year control over, rose by 6.9% in 1991, and 6.1% in 1994—hardly a reduction in the real world. But Democrats were still able to garner kudos for a supposedly Republican objective: reducing the deficit.
Republicans are correctly pointing out that September 11th exacerbated fiscal problems by slowing growth, and thus tax revenues, and forcing us to cough up $40 billion as a down payment on recovery and protection. But the fact remains that spendthrift habits created most of the current mess, and the post-9/11 spending spree for items unrelated to recovery or homeland defense are only making matters worse.
In order to vanquish the excessive pork and new government programs being peddled by Sen. Tom Daschle and company, conservatives need to remind the American people that, in these times, unnecessary spending is, well, stupid.